Slide 1: Orora Full Year Results
Orora Full Year Results Full Year Ended 30 June 2017 Presentation by Nigel Garrard – Managing Director and CEO Stuart Hutton – CFO 10th August 2017
Slide 2: Important information
Important information Forward Looking Statements This presentation contains forward looking statements that involve subjective judgment and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to Orora. Forward look
Slide 3: FY17 financial highlights
FY17 financial highlights SALES REVENUE EARNINGS BEFORE INTEREST AND TAX (EBIT) 4.9% $4,039m 11.1% $302.3m Double-digit earnings growth is being converted Earnings growthintois being strong cash flow, converted increased into strong NET PROFIT AFTER TAX (NPAT) EARNINGS PER SHARE (EPS) dividends and
Slide 4: Orora safety performance
Orora safety performance Safety is a priority and ongoing journey for Orora June 2016(1) June 2017 • RCFR was unchanged RCFR 6.8 6.8 • Continued reinforcement of standards • Heightened awareness at existing sites LTIFR 1.6 1.6 • Progressive implementation of Orora’s safety standards and processes at
Slide 5: FY17 Australasia financial highlights
FY17 Australasia financial highlights SALES REVENUE EBIT • Continued volume growth in Glass and Wine Closures; Can volumes slightly lower 2.3% $2,001.6m 6.6% $213.6m • Steady volumes in Fibre Packaging with market channel and segmentation strategy tracking well • B9 produced 373,000 tonnes of recycl
Slide 6: Australasia EBIT growth
Australasia EBIT growth 6.6% Earnings Growth 20.5 (7.3) 213.6 200.4 (A$’M) FY16 Organic Initiatives Input Cost Headwinds FY17 (net of pass through) Orora Ltd 2017 “ Organic earnings benefits more than offset input cost headwinds at Glass & B9 ” 6
Slide 7: Orora Australasia margin improvement
Orora Australasia margin improvement EBIT Trend(1) Return on sales (ROS) up a further 50 bps to 10.7% in FY17 AUD Million • Higher sales volumes in Glass and Wine Closures, 250 10.7% notwithstanding Glass downtime (capacity expansion & 10.2% SA blackout) 200 • Final delivery of B9 benefits 9.4% • Bu
Slide 8: Investing to improve manufacturing capability within Fibre Packaging
Investing to improve manufacturing capability within Fibre Packaging ~$70M committed for investment in the ANZ Fibre Packaging business over the past 3 years Over $70M committed to improving • Improving quality and output capacity • Upgrading printing and converting assets Fibre Packaging • Investme
Slide 9: Further self help initiatives – sustainability and energy efficiency
Further self help initiatives – sustainability and energy efficiency $23M investment in a waste water treatment plant at B9 • Reduces volume of regulated effluent discharged from the site • Process generates biogas (renewable energy) which will be converted to electricity for use in B9 network and p
Slide 10: Volatile Old Corrugated Cardboard (OCC) prices
Volatile Old Corrugated Cardboard (OCC) prices • Orora sources ~90% OCC as feedstock for B9 - range of vendors, mixture of terms OCC AUD$ / tonne • Orora collects the remaining ~10% of mill requirements directly • Price of OCC retreated from high set in Mar 17 – but now tracking at the top end of hi
Slide 11: FY17 North America financial highlights
FY17 North America financial highlights USD SALES REVENUE USD EBIT OPS • Delivered strong organic sales growth with USD 11.4% $1,536.1m 23.1% $88.6m revenues up 4.2% despite economic and market conditions remaining flat • Manufacturing division focus on improved efficiencies and operating cost contr
Slide 12: North America EBIT growth
North America EBIT growth 18.8% Earnings Growth (23.1% excluding FX impact) 22.7 (4.1) 117.5 98.9 (A$’M) FY16 Growth fx FY17 “ Orora Ltd 2017 Sales growth (organic & share gain), margin expansion and contribution from Orora Visual driving 23% constant currency earnings growth ” 12
Slide 13: OPS margin improvement
OPS margin improvement EBIT Trend(1) ROS up a further 30 bps to 5.4% in FY17 USD Million • Emphasis on moving towards higher value, 80 5.4% customised offerings in targeted segments of food, IT, auto parts and pharmaceutical/health 5.1% • Continued focus on procurement and supply chain 60 optimisati
Slide 14: Orora Visual - integration update
Orora Visual - integration update • Successfully completed the acquisition of Register (New Jersey) in January 2017, Garvey Group (Chicago and Los Angeles) and Graphic Tech (Los Angeles) in March 2017 Established a single • Chief Operating Officer commenced in May 2017 to help drive Orora Visual’s ‘
Slide 15: Orora Corporate
Orora Corporate Earnings Summary (EBIT) Corporate costs were $28.8M – slightly higher than prior year due to: A$ Million FY16 FY17 ∆% – ongoing restructuring costs in Australasia that are delivering cost Underlying Corporate (27.2) (28.8) (5.9) reductions and increasing earnings – Costs associated w
Slide 16: Strong operating cash flow
Strong operating cash flow A$ Million FY16(1) FY17 Operating cash flow increased 5.6% to $331.5M EBITDA 379.6 418.4 • Reflecting higher earnings and disciplined balance sheet management Non Cash Items 34.9 32.5 • Cash conversion of 74% - in excess of 70% management target(3) Cash EBITDA 414.5 450.8
Slide 17: Balance sheet and debt
Balance sheet and debt Balance Sheet Robust balance sheet to enable further growth investment A$ Million June 16 June 17 • Reduced leverage through conversion of earnings into cash Funds Employed (period end) 2,128 2,221 o Leverage of 1.6x - down from 1.7x at June 2016 and pcp o Adverse FX impact on
Slide 18: Our Orora – culture of driving outperformance
Our Orora – culture of driving outperformance Orora Ltd 2017 18
Slide 19: Orora's blueprint for creating shareholder value
Orora’s blueprint for creating shareholder value ORGANIC RETURNS FOCUSED GROWTH SUSTAINABLE GROWTH CAPITAL ALLOCATION DIVIDEND Orora Orora North Australasia America Organic Growth Bolt-on M&A Adjacent 60-70% GDP Sales GDP+ Sales Capital (North America Focused) M&A Pay Out Ratio Growth Growth GDP bas
Slide 20: Orora has committed ~$400M since ASX listing
Orora has committed ~$400M since ASX listing in December 2013 FY14 FY15 FY16 FY17 TOTAL INVESTMENT Established 2 new East Coast $29M spend committed from New customer backed US DCs (Charlotte & Orora Global Innovation Dairy Sack Line ($20M) Orlando) – both customer initiative to date Organic backed
Slide 21: Committed to creating shareholder value
Committed to creating shareholder value What we said we would do What we have done in FY17 Shareholder value creation 1. Organic sales growth, profitable market share gain & 1. OA - delivered 2.7% underlying sales growth • EPS growth of 14.6% improved efficiency/cost control ONA - 4.2% organic sales
Slide 22: Perspectives for 2018
Perspectives for 2018 Australasia • The $42M Glass upgrade project has been completed successfully and the investment is expected to exit FY18 generating PBIT benefits at return hurdle rates. • Orora has made positive progress in relation to securing warehouses nearby the Gawler facility which will
Slide 23: Outlook
Outlook Orora expects to continue to drive organic growth and invest in innovation and growth during FY18, with constant currency earnings expected to be higher than reported in 2017, subject to global economic conditions Orora Ltd 2017 23
Slide 24: Appendix
Appendix 1 $15.1M Significant Item Additional Decommissioning Costs
Slide 25: Significant item – higher decommissioning cost for old Petrie Mill site
Significant item – higher decommissioning cost for old Petrie Mill site • An after tax significant item expense of $15.1M relating to expected additional decommissioning costs at the Petrie Mill site has been recognised in FY17. • This followed an interim project review and a reassessment of the est